Risk perceptions of climate change, risk preferences and cacao farming

In this study, we investigate cacao farmers' risk perceptions of climate change and how they relate to the use of agronomic practices that will help them combat the effects of weather variability. We measure risk preferences and risk perceptions using a nationally representative survey and framed feld experiments conducted in Ecuador-the world's largest producer of fne and favor cacao. We fnd that cacao farmers, overall, have reasonable perceptions of high risk of climate change. More importantly, we fnd that relationships between climate change risk perceptions and potential agronomic mitigation activities occur for the case of fertilization practices only. That is, individuals who perceive a greater risk of climate change have higher expenditures on fertilization activities. Finally, we show that these fndings are robust to the infuence of experimentally elicited risk preference parameters, i.e. prospect theory or DOSPERT parameters. As the perception of risk is a necessary prerequisite for deciding on actions to adapt to climate risk, these results have important policy implications for the development of programs aimed at mitigating the effects of climate change on the cacao sector and the global chocolate industry.